TAIPEI (Taiwan News) — Credit information agency CRIF Taiwan on Tuesday warned that the Iran war is expected to affect consumers, as higher energy, logistics, and import prices push up everyday living expenses.
CRIF said that although Washington and Tehran have signaled willingness to pursue peace talks, major differences remain, per CNA. Global attention is now focused on whether the US will target Iran’s power infrastructure and Tehran's retaliatory actions.
The agency said that as long as the war continues, it will have spillover effects on four key areas for Taiwan, including energy supply, oil price, consumer price fluctuations, and exchange rate volatility.
It said the Strait of Hormuz blockade could delay liquefied natural gas shipments from Qatar to Taiwan, increasing supply pressures. A rise in global oil prices from US$80 (NT$2,500) to US$120 per barrel, combined with the Taiwan dollar weakening from NT$31 to NT$32.5 to the US dollar, would compound cost pressures for firms.
CRIF said the Taiwan dollar’s real purchasing power has already fallen by about 3% to 5% since the war began. This has intensified imported inflation and pushed consumer prices higher.
Rising fuel costs have also increased logistics expenses, with delivery and courier fees climbing by NT$5 to NT$10 per order. Higher air and sea freight charges have pushed up prices of imported goods such as beef, dairy products, and fruit by 8% to 12%.
The agency said that if the conflict escalates again, whether chain restaurants launch another wave of price hikes within the next two to four weeks will be a key indicator. It expects major restaurant chains could raise prices by 5% to 10% starting in April due to higher ingredient and transport costs.
The Central Bank is under pressure to stabilize the currency amid ongoing volatility. It may intervene in foreign exchange markets to prevent sharp depreciation.
However, if a weaker Taiwan dollar drives up the consumer price index, the Central Bank may be forced to raise interest rates next quarter. This would increase financial strain on mortgage holders and businesses.
CRIF estimated that a rate hike of 0.125 to 0.25 percentage points would raise monthly payments on a NT$10 million mortgage by NT$1,000 to NT$2,000. A family of four could see monthly expenses rise by NT$5,000 to NT$7,500 due to reduced purchasing power and higher costs.
Overall, CRIF said Taiwan’s economic resilience is being tested. If the war continues into May during peak summer electricity demand, high procurement costs could keep prices elevated.
However, if the conflict ends soon or maritime escort efforts prove effective, Taiwan may be able to mitigate the negative impact of high oil prices.
